The global economy is doing quite nicely and growth is nearly uniform over all sectors, but one in particular is booming times: the global arms trade, which accounts for 2.2% of global GDP.
Now SIPRI, the Stockholm International Peace Research Institute, has published shocking figures that say international arms sales are currently at their highest level since the end of the Cold War.
Emerging pattern of growth
Globally, total military expenditure reached $1686 billion in 2016, up 0.4% in real terms from 2015.
In Western Europe, this was the second consecutive year in which growth was seen in the sector; in North America, military spending grew for the first time since 2010. There are significant regional variations, however, with spending dropping in Central America, the Caribbean, South America, Sub-Saharan Africa, and the Middle East (based on countries for which data is available).
Comprehensive world data is available here
The world’s biggest military spenders
The US has the highest annual military expenditure in the world, at $611 billion in 2016, followed by China, at $215 billion, and then Russia, at $69.2 billion.
In the Middle East, Saudi Arabia’s spending dropped by 30% to $63.7 billion despite its continued involvement in conflicts in the region.
Despite this spending drop, in the Middle East as a whole, military spending accounts for the highest proportion of GDP anywhere in the world, at an average of 6%.
India is the world’s fifth biggest spender, at $55.9 billion, a growth of 8.5% from 2015.
Why is military expenditure on the increase?
SIPRI suggests that the growth in US military expenditure might herald the end of a period of decreases resulting from the economic crisis and the withdrawal of US troops from Iraq and Afghanistan.
Dr Aude Fleurant, Director of the SIPRI Arms and Military Expenditure (AMEX) Programme said
“Despite continuing legal restraints on the overall US budget, increases in military spending were agreed upon by Congress. Future spending patterns remain uncertain due to the changing political situation in the USA.”
In Europe, the growing perception of threat may be at the root of increased military expenditure in all but three countries in Western Europe last year. Italy had the largest increase from 2015, at 11%.
In Central Europe, SIPRI suggests that an overall increase of 2.4% could be due to a perception that the threat from Russia has increased.
Siemon Wezeman, Senior Researcher op the AMEX programme, said:
“This is despite the fact that Russia’s spending in 2016 was only 27 per cent of the combined total of European NATO members.”
In Asia and Oceania, the 4.6% rise in military expenditure may be related to the many tensions in the region, such as over territorial rights in the South China Sea.